How to Cancel a Direct Debit Payment On Your Credit Card

Do you know what to write? Learn the basics of what to include in your letter for cancelling a direct debit payment on your credit card.

Cancelling a direct debit from your credit card does not involve rocket science, but it’s crucial that you pay attention to certain aspects to ensure it runs smoothly

Upon signing up for a direct debit you give someone else permission to request funds directly from your credit card account on an ongoing basis. While this gives you an easy way to make payments on time, there are instances when you might want to put a stop to a particular direct debit. While certain financial institutions might make it seem like cancelling a direct debit is a lengthy and tedious process, the truth is you can do this by following a few simple steps. Before you take these steps though, confirm that you’re not breaching the terms of a contract by cancelling an ongoing direct debit.

Why would I need to cancel a direct debit payment?

Direct debits can simplify how you make payments, but there are instances when you might want to put a stop to one or more direct debits. Some of the most common reasons to stop direct debits include the following:

There is a change in your income and you want more control in your how handle your expenses

You want to cancel a subscription, for example, to a magazine or gym membership

You’ve moved and you want to stop direct debits to previous utility providers

You want to cancel a direct debit you signed up for in haste or unwittingly

What steps will I need to take?

The Australian Code of Banking Practice states that banks should take prompt action in processing direct debit cancellation requests, and the Mutual Code of Banking Practice has a similar stipulation in place for credit unions and mutual building societies. The steps to cancel a direct debit from a bank account and a credit card vary slightly, and to cancel an existing direct debit from your credit card, follow these simple steps:

Write a letter to the merchant who has the direct debit authority asking it to cancel the arrangement

Send a copy of this letter your credit card provider

Check with the financial institution in a few days to establish if it has cancelled the direct debit

A sample letter and guide

The letter you write to your financial institution instructing it to cancel a direct debit requires you that you mention the account you’re referring to along with the payment you want cancelled. You don’t have to explain why you wish to cancel any direct debit, given that doing so is your prerogative. Bear in mind, though, that cancelling a direct debit in the middle of a contract term can come with repercussions, so it’s best that you get legal advice in such a situation.

Sample letter

[Your name and address]

[Date]

The Manager,
[Name of bank, building society or credit union]
[Name of branch]
[Address]

My/Our account name: [ ]
Credit Card Account No: [ ]

Dear Manager,

RE: CANCELLATION OF DIRECT DEBIT

I/We advise you that I/we have cancelled the direct debit authority previously given to [name of merchant] from my/our credit card account with immediate effect. I am enclosing a copy of the letter I/we have sent to the merchant.

Yours faithfully,

[Signature]

[Name]

Click here to download this as a Word document to edit directly. To save it to your hard drive, right click and choose “Save As”. Navigate to the folder you wish to save it to and click OK.

When and what can I expect from the response?

Your credit card provider cannot legally refuse to honour your request for a direct debit cancellation. If your card provider refuses to cancel a direct debit, simply inform the representative you’re dealing with that clause 19.1 of the Code of Banking Practice requires the institution to, not just honour your request, but do it promptly. If your credit card provider does not cancel the direct debit, and if it makes further payments through the same direct debit, you can request for a reversal of funds. If you face problems at any stage, you can file a complaint with the institution’s internal dispute resolution team, and if this does not help you can move to the Credit Ombudsman Service or get advice from Consumer Action’s public line.

What else should I be wary of?

Cancelling a direct debit linked to your credit card is not particularly difficult, but there are some factors that you’ll need to keep an eye on:

Breach of contract. If the direct debit you wish to cancel comes linked to a product or service you’ve purchased in the past, and you’ve to keep making payments for a given time period, cancelling such a direct debit can lead to a breach of contract, which can come with legal consequences. If you plan to cancel any such direct debit, it’s best that you seek legal advice first.

Implementation of instructions. You instructing your credit card provider to cancel a direct debit is one thing, and it implementing your request is another. As a result, make sure you go through your credit card statements carefully and check if the debits in questions have stopped.

Time limitations on chargebacks. If your credit card provider doesn’t cancel a direct debit, contact it as soon as possible for a chargeback. This is because card providers have different time limits in place when it comes to processing chargebacks.

Cancelling a direct debit from a bank account or a credit card is not difficult, and one of the main differences is that in case of a credit card you have to get in touch with the merchant you’ve authorised for the direct debit first. You still have to contact your credit card provider and instruct it to cancel the direct debit in question, and you should do this in writing. At every stage, don’t forget that your card provider has to honour your request.

Frequently asked questions

What should I do if I wish to cancel my credit card altogether?

You would first have to pay your account’s outstanding balance in full, and then ask your credit card provider to cancel your account.

Can I ask a service provider to pause a direct debit for a temporary period?

Unfortunately, you cannot. You would have to cancel the direct debit and then restart it again.

I noticed an unauthorised direct debit on my credit card statement. What should I do?

You should get in touch with your credit card provider as soon as possible.

Related Posts

We have put together a complete guide to managing direct debit payments from your credit card account. Follow our guide to avoid any pitfalls and to get a full understanding of how direct debit payments work.

Direct debit has become one of the most convenient ways to manage your regular bill payments. It allows you to almost "set and forget" but it's really important you understand how they work before locking in to any direct debit arrangement.

Cancelling a credit card can be a good idea, especially if you're not using it any longer, or if it's been stolen. But it's important you do it the right way, or you risk the account still running and incurring fees that you might not be aware of.

As an ANZ applicant or existing cardholder, you can put a personal touch on your credit or debit card with ANZ's 'designmycard' wherein you can choose from a library of images or even add your own picture to the card if you wish.

Staying on top of your finances can take some effort. It is not always easy to know what to do and when to do it. Using credit cards is convenient and can be a useful tool but when you are finished with them, it is important to know how to go about closing the account.

Ask a Question

Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public

finder.com.au is a financial comparison and information service, not a bank or product provider

We cannot provide you with personal advice or recommendations

Your answer might already be waiting – check previous questions below to see if yours has already been asked

Your Question

Subscribe to our newsletter

Notify me of followup comments via e-mail.

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

4 Responses to How to Cancel a Direct Debit Payment On Your Credit Card

As your debit card gives you access to your transaction account, you can just write a basic letter informing the bank of your name, account number and account information and the date you want your debit card cancelled. If you would also like to cancel your transaction account you can see this page.

Hi Kgauhelo. Thanks for your question. You may need to wait until the time you wish to cancel the direct debit, as the insurance provider may not be able to arrange a future cancellation of direct debit. The best thing to do is to give them a call and find out what their policy is. Otherwise, please use the example on this page to draft a letter to your provider. Jacob.

* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

Disclaimer -
Hive Empire Pty Ltd (trading as finder.com.au, ABN: 18 118 785 121) provides factual information, general advice and services on financial products as a Corporate Authorised Representative (432664) of Advice Evolution Pty Ltd AFSL 342880. Please refer to our FSG - Financial Products. We also provide general advice on credit products under our own Credit Licence ACL 385509. Please refer to our Credit Guide for more information. We can also provide you with general advice and factual information on about a range of other products, services and providers. We are also a Corporate Authorised Representative of Countrywide Tolstrup Financial Services Group Pty Ltd. ABN 51 586 953 292 AFSL 244436 for the provision of general insurance products. Please refer to our FSG - General Insurance. We hope that the information and general advice we can provide will help you make a more informed decision. We are not owned by any Bank or Insurer and we are not a product issuer or a credit provider. Although we cover a wide range of products, providers and services we don't cover every product, provider or service available in the market so there may be other options available to you. We also don't recommend specific products, services or providers. If you decide to apply for a product or service through our website you will be dealing directly with the provider of that product or service and not with us.
We endeavour to ensure that the information on this site is current and accurate but you should confirm any information with the product or service provider and read the information they can provide. If you are unsure you should get independent advice before you apply for any product or commit to any plan. (c) 2015.

Important information about this website

finder.com.au is one of Australia's leading comparison websites. We compare from a wide set of major banks, insurers and product issuers.

finder.com.au has access to track details from the providers listed on our sites. Although we provide information on the products offered by a wide range of issuers, we don’t cover every available product. You should consider whether the products featured on our site are appropriate for your needs and seek independent advice if you have any questions. Products are displayed in no particular order or ranking. The use of terms "Featured", "Best" and "Top" are not product ratings and are subject to our disclaimer.

Where our site links to particular products or displays ‘Go to site’ buttons, we may receive a commission, referral fee or payment. We also include products in particular comparisons or display products as ‘featured’ where the products being displayed or compared have commissions or referral fees or payments associated with them which we receive from product providers.

Disclaimer

Comparisons are not intended to be comprehensive of the market of available products and the not all providers in the market will always be included in our comparisons.

Where advertisements appear on this site they should not be taken as ranking or referencing any particular product above another in terms of its suitability for your use. Where terms such as “Top”, “Best”, “Editor’s Choice” and other terms indicating a selection of products but are in a no particular order, these terms are not based on objective criteria and may not apply in relation to your personal circumstances.

Financial products compared do not compare all features that may be relevant to you in your choices about which product to utilise.

Where it is stated on this site that we have analysed offers in the market, the process of analysis is restricted to the information subsequently disclosed and may not be suitable for your personal circumstances and may not be compare all features that may be relevant to you.

Please read our website terms of use for more information about our services and our approach to privacy